The high price of global food

Published 4:00 am, Sunday, April 6, 2008

What do skyrocketing milk prices in America, pasta shortages in Italy, bread riots in Egypt and high oil prices all over the world have in common?

The global economy is hitting everyone's grocery bill. And while things aren't going to be pretty in America or Europe for the next several years - Italian consumer groups have already waged a strike against the food that represents their national identity - we've got it easy compared to the world's poor. World hunger - that plague that seemed to be on the decline as a global scourge - is slowly making a comeback, and it's set to get far worse.

The fact that it's become at least as profitable to raise grain for fuel as for food is part of the problem. The other part of the problem is the world's success. The world's developing countries are seeing stunning economic growth - about 7 percent annually - and they want to eat like Americans.

That means more meat (which is tremendously resource-intensive in terms of the amount of grain it takes to produce), more bread, more, more, more.

Farmers are scrambling to meet the demand, but it's impossible for them to rapidly ramp up production to the levels it would take to supply not just millions of new customers, but also the world fuel market. Worldwide stockpiles of basic grain - wheat in particular - have hit decades-long lows.

Worried about high prices and an angry population, many countries may feel tempted to hoard what grain or meat they have at home - thereby keeping local prices low - instead of exporting their surpluses.

While this policy is understandable, it will only make things less affordable for everyone in the long run. It will be good for Americans' diets if the era of cheap food is over here. The question is, how much more can the rest of the world pay without going hungry?

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